Wednesday, December 12, 2012

I'm dreaming of (a) white chocolate

Miller v. Ghirardelli Chocolate Co., 2012 WL 6096593 (N.D.
Cal.)

Miller bought a package of “Ghirardelli Chocolate Premium
Baking Chips Classic White” and then brought a putative class action against
Ghirardelli, complaining that this and four other Ghirardelli Chocolate
products were marketed as “White” or “White Chocolate Flavored” when they did
not contain any white chocolate, asserting the usual California claims,
including fraud.Ghirardelli argued that
Miller didn’t have standing as to the other four products; the court agreed,
but denied Ghirardelli’s motion to dismiss in other respects.

Miller alleged that he set out to buy white chocolate chips;
reviewed the package before purchase; later tasted the chips and thought they
didn’t taste right; and then checked the ingredients list and discovered that
they contained no white chocolate, cocoa, or cocoa butter. “White chocolate” and “white chocolate flavor”
are regulated by the FDA. Products labeled as “white chocolate” must contain a
minimum of 20 percent cocoa butter, and “a product may cannot be called ‘white
chocolate flavored’ unless it has some natural derivative of cocoa butter or
cacao fat.” Miller alleged that he wouldn’t have bought the chips or would have
paid less for them but for Ghirardelli’s misrepresentations.Miller also challenged Ghirardelli’s White
Chocolate Flavored Confectionary Coating Wafers; Sweet Ground White Chocolate
Flavor; Premium Hot Beverage—White Mocha; and Frappé Classico—Classic White.(I suppose one lesson is: when someone offers
you a “hot beverage,” it makes sense to ask “what is it?”)

As for the baking chips, Miller alleged that the package’s
use of “Classic White,” and “Premium,” misleads consumers into believing the
baking chips contain classic or premium white chocolate. Further, the packaging says:

This “romance” language misleads, he alleged, because it
suggests that the packaging contents are white chocolate and because identical
language appears on another product that does contain white chocolate—the
Ghirardelli® Chocolate Premium Baking Bar.

The wafers allegedly misled with the name “White Chocolate
Flavored Confectionary Coating Wafers,” used even though though the wafers are
not flavored with white chocolate and contain no cocoa butter or cacao fat.
Plus, a Ghirardelli chocolate product likely to be shelved near it at a similar price used a similar
label. As for Sweet Ground White
Chocolate Flavor, the label indicated that
the product can be used in white chocolate hot cocoas and white mochas and that
it has a “luxuriously rich and complex white chocolate flavor.”Miller alleged this was misleading because
the product does not contain a cocoa derivative, and is misleadingly sold
alongside similarly labeled products that do contain cocoa. For Premium Hot Beverage—White Mocha, the
packaging said: “The rich indulgent flavor of Ghirardelli Premium White Mocha
creates the pleasurable moment cocoa lovers cherish,” though it contains no
cocoa and though “white mocha” allegedly implies a combination of white
chocolate and coffee. The final product's packaging said: “The luxuriously rich and complex
flavor of Ghirardelli's Classic White Frappé Classico creates the pleasurable
moment cherished by white chocolate lovers,” allegedly implying derivation from
white chocolate; Miller also alleged that the product was likely to be sold alongside
a similarly labeled Ghirardelli frappe product
which actually contains chocolate.

In addition, Miller alleged shared misrepresentations: the
packaging prominently uses the term “chocolate” in the company name; the labels
for the baking chips and frappe employ the terms “Classic White” and
“Classico,” respectively, to deceptively suggest the products are unchanged
from an original white chocolate product; Ghirardelli sells the products for
the same price as analogous products containing real chocolate.

Ghirardelli argued that Miller lacked standing for the four
proudcts he didn’t buy.Some courts have
accepted that argument on a blanket basis.Other courts have waited for a motion for class certification to resolve
the issue.“The majority of the courts
that have carefully analyzed the question hold that a plaintiff may have
standing to assert claims for unnamed class members based on products he or she
did not purchase so long as the products and alleged misrepresentations are substantially
similar.”Thus, there may be standing to
assert claims based on all flavors of a product when the alleged
misrepresentations are the same across flavors (just as there’d be standing to
assert claims based on all sizes of a product).In non-food cases, courts have also examined whether alleged
misrepresentations are sufficiently similar across product lines, for example
“environmentally friendly” claims on glass cleaner and stain remover.

Here, the court found, the products and alleged
misrepresentations weren’t sufficiently similar to confer standing on
Miller.They did have some similarities
in packaging, composition, and labeling: they were labeled Ghirardelli
Chocolate, which suggested a connection to chocolate; they didn’t contain cacao
butter; they were sold next to products that do contain chocoloate or white
chocolate; and they used words creatng a connection to white chocolate.But the products were different: baking
chips, three drink powders, and wafers. They looked different, had different labels,
and only one other product was a baking product, and confectionary wafers are
different from chips for cookies.They
also had different customers; two of the drink powders’ labels said they were
marketed to retailers.

The baking chips’ use of “Classic White,” “Premium,” and the
“romance language” on the package set up a connection among “Premium Baking
Chocolate,” the roasting of cocoa beans, the creation of award-winning
chocolate, and the challenged “Classic White Baking Chips.” In addition, the
complaint alleged that the product was sold alongside of and equivalently
priced to “Ghirardelli Chocolate White Chocolate Premium Baking Bar,” a
similarly-labeled product that does contain white
chocolate (the other products were allegedly sold alongside regular, or as my father would say, real, chocolate products). “This alleged
connection to chocolate is arguably stronger and at least different than that
for the other products.”Only the frappe
label used “Classic White,” and its “romance language” was very different: on
the label, it said it was “[d]esigned exclusively for specialty coffee
retailers,” and had a “luxuriously rich
and complex flavor ... that creates the pleasurable moment cherished by white
chocolate lovers.” (If Miller’s correct about misleadingness, I wonder if Ghirardelli is
inducing false advertising by retailers.)

Miller also alleged that the labels for the wafers and white
chocolate flavor employ the words “flavor” and “flavored” in a manner that
violates FDA regulations and the Sherman Food, Drug and Cosmetic Law, but those
words weren’t on the baking chips packaging, and the mocha mix also had “little
discernable similarity” to the baking chips.“Miller's best argument is that the labels imply white chocolate
content, but the alleged misrepresentations vary widely.”His final argument, that the combination of
the “Ghirardelli Chocolate” branding on the front of the label on top of the
characterization of the product “means that—under the FDA regulations and
standards—the harm is identical across product lines,” as in cases finding
standing.But this argument was better
considered in the context of a motion to dismiss an amended complaint with
factual allegations targeted this theory.

Ghirardelli then argued that Miller’s allegations about the
baking chips were legally insufficient to state a claim; the court disagreed.A reasonable consumer could be deceived, at
least on these allegations.This wasn’t
a case about clearly fake products like FROOT LOOPS, which contain no fruit.Ghirardelli argued that the product was
called “Classic White Baking Chips” and not “white chocolate chips” (which is, in my opinion, chopping the not-chocolate a little fine: white what?); that “Finest
grind for smoothest texture” describes the product's consistency and does not
imply chocolate content; that reasonable consumers couldn’t misinterpret
references to the flavor and texture of Ghirardelli's Premium Baking Chocolate;
and that, by referring to the baking chips as containing “pure vanilla and whole
milk powder,” the label disclosed that it contained no white chocolate.These arguments merely raised factual questions inappropriate on a motion to dismiss.

Creative Commons/disclaimer

Text on this blog is licensed under a Creative Commons Attribution 2.5 License. Pictures and works quoted may be subject to other parties' copyrights.
I speak for myself. On this blog, I do not and cannot speak for Georgetown Law, the Organization for Transformative Works and/or AO3.